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The Business Benefits of Regular Performance Management Reviews

An alarm clock on a table with a pile of coins around it.

How can fre­quent one-to-one meet­ings actu­al­ly change your com­pa­ny for the better?

By now, you’ve prob­a­bly read plen­ty of arti­cles about how few­er and few­er com­pa­nies are mak­ing use of annu­al per­for­mance appraisals. They have seen their day and they have been trad­ed in for a more effi­cient sys­tem of reg­u­lar per­for­mance reviews and feedback.

What you might be more inter­est­ed in know­ing at this crit­i­cal junc­ture is how exact­ly your com­pa­ny will ben­e­fit from over­haul­ing your per­for­mance man­age­ment cycle. What are the actu­al busi­ness ben­e­fits that will help strength­en your organ­i­sa­tion and take it to the next lev­el? Below, we’ll cov­er the five main ben­e­fits you will see after intro­duc­ing reg­u­lar per­for­mance man­age­ment reviews, once you have care­ful­ly and thought­ful­ly tran­si­tioned away from a more tra­di­tion­al system.

1. With reg­u­lar per­for­mance man­age­ment reviews comes increased job satisfaction

Put sim­ply, employ­ees are always hap­pi­er when they have access to more fre­quent feed­back. It has been shown that 65% of employ­ees want more feed­back than they cur­rent­ly receive, yet many com­pa­nies appear slow to respond. This is a great shame, as with reg­u­lar feed­back dis­cus­sions comes an increased under­stand­ing and con­fi­dence in your work. That means your employ­ees will be more engaged, more dri­ven and more able to succeed.

Addi­tion­al­ly, such dis­cus­sions pro­vide an oppor­tu­ni­ty for employ­ee recog­ni­tion, which can have a huge impact on both morale and job sat­is­fac­tion. Nev­er under­es­ti­mate the pow­er of acknowl­edg­ment. It can encour­age tremen­dous enthu­si­asm and com­pa­ny loyalty.

2. Com­pa­nies can use reg­u­lar employ­ee per­for­mance man­age­ment dis­cus­sions to cut staff turnover

Think­ing about intro­duc­ing reg­u­lar per­for­mance dis­cus­sions? You should know that com­pa­nies that have done so have expe­ri­enced a notable improve­ment in terms of reten­tion, sav­ing them a sig­nif­i­cant amount of time and money.

In fact, organ­i­sa­tions that intro­duce fre­quent one-to-ones with their employ­ees gen­er­al­ly see a 14.9% low­er turnover rate. A par­tic­u­lar­ly impres­sive and famous exam­ple is that of Adobe, who wit­nessed a 30% reduc­tion in vol­un­tary turnover when it shook up its per­for­mance man­age­ment system.

3. More fre­quent com­mu­ni­ca­tion regard­ing SMART objec­tives affords greater clarity

Remark­ably, many employ­ees strug­gle through their day-to-day roles, not actu­al­ly know­ing what is expect­ed of them. This is obvi­ous­ly ter­ri­ble for the com­pa­nies that hire them. An unin­formed employ­ee is not going to be pro­duc­tive, they’re not going to per­form well and they’re not going to achieve their goals if they don’t know what they are in the first place.

When you incor­po­rate reg­u­lar per­for­mance reviews, man­ag­er and employ­ee are able to fre­quent­ly read­dress SMART objec­tives. Rather than hav­ing a few over-arch­ing objec­tives that grad­u­al­ly become irrel­e­vant over the course of a year, short-term goals can be set, mean­ing that man­ag­er and employ­ee have the oppor­tu­ni­ty to reg­u­lar­ly col­lab­o­rate and clar­i­fy objec­tives. Man­agers can set expec­ta­tions and employ­ees can ask ques­tions, while simul­ta­ne­ous­ly tak­ing own­er­ship over their goals. Using this approach, employ­ees devel­op a great sense of pride in their work and are more con­fi­dent in their abil­i­ty to achieve their set objectives.

4. Reg­u­lar per­for­mance dis­cus­sions influ­ence career growth

At Clear Review, we rec­om­mend the intro­duc­tion of month­ly check-ins. As well as dis­cussing con­cerns, achieve­ments, and goals, employ­ee and man­ag­er can dis­cuss devel­op­ment oppor­tu­ni­ties dur­ing this time.

Train­ing and devel­op­ment is an essen­tial area of per­for­mance man­age­ment, so time should be ded­i­cat­ed to per­son­al devel­op­ment plans (PDPs). How is the employ­ee pro­gress­ing? Where could they improve? What steps does the employ­ee need to take in order to advance fur­ther in the com­pa­ny? Address­ing these ques­tions will ben­e­fit both the com­pa­ny and the employ­ee. The employ­ee will realise that their organ­i­sa­tion gen­uine­ly cares about their future at the com­pa­ny. As a result, the busi­ness will ben­e­fit from a skilled, deter­mined and moti­vat­ed employee.

5. Reg­u­lar per­for­mance dis­cus­sions are actu­al­ly more time-effi­cient than annu­al reviews

Though it might sound coun­ter­in­tu­itive at first, intro­duc­ing more fre­quent per­for­mance dis­cus­sions in place of a sin­gle annu­al appraisal real­ly is more time-effi­cient. Annu­al reviews sim­ply don’t deliv­er a strong return on invest­ment when it comes to train­ing, devel­op­ing and engag­ing employ­ees. Accord­ing to one source, Accen­ture once spent over 2 mil­lion hours on per­for­mance reviews. Before adapt­ing its per­for­mance man­age­ment sys­tem, Adobe ded­i­cat­ed 80,000 man­age­ment hours each year in order to con­duct annu­al reviews.

The prob­lem is that these hours aren’t a great use of man­age­ment time. They are dread­ed by employ­ees and don’t pro­duce reli­able results. Annu­al appraisals try to accom­plish too much in one meet­ing and, as such, they tend to pro­duce very lit­tle. On top of this, annu­al appraisals are usu­al­ly accom­pa­nied by a lot of form-fill­ing, which takes up a lot of HR, man­age­ment and employ­ee time.

Reg­u­lar per­for­mance dis­cus­sions hap­pen more fre­quent­ly, so man­age­ment and HR are kept up to date on employ­ee progress. Meet­ings are short­er and more infor­ma­tive and, on top of this, trust­ing rela­tion­ships are able to form between employ­ee and man­ag­er, mean­ing that con­ver­sa­tion is more meaningful.

Though this quan­ti­ty of meet­ings might sound daunt­ing at first, these check-in’ meet­ings can be short and sharp, and results pay off in the end. Think it might be a strug­gle to keep track of it all? Your com­pa­ny can make use of per­for­mance review soft­ware to track and sched­ule meet­ings to ensure they take place and that action points are captured.

If you are sold on the busi­ness ben­e­fits of reg­u­lar per­for­mance dis­cus­sions, use our free and infor­ma­tive one-to-one meet­ing tem­plate. This will help you with your tran­si­tion to con­tin­u­ous per­for­mance man­age­ment by guid­ing your con­ver­sa­tions and giv­ing you impor­tant points for discussion.

To find out how Clear Review’s ded­i­cat­ed and expe­ri­enced HR team can help you tran­si­tion to con­tin­u­ous per­for­mance man­age­ment, get in touch today for a free per­for­mance man­age­ment con­sul­ta­tion.